How a Grexit and Brexit Would Unravel Europe

BERLIN -- Since 2008, when the global financial crisis erupted, the European Union has been confronted by a succession of crises: the escalating Greek crisis; Russian revanchism in Ukraine; and the refugee crisis in the Mediterranean (which is inextricably linked to the regional crisis in the Middle East and Africa's various wars). These crises have stretched the EU's powers and institutions up to -- and beyond -- their limits, which is why Europe's response has been so mortifyingly weak.

The ineffectiveness of existing institutions and structures in the face of today's threats is now jeopardizing the EU's legitimacy, because Europe's citizens are calling for solutions that the EU obviously is unable and partly unwilling to provide. One consequence is erosion of support for the EU among its member states' electorates.

Certainly, events could turn out positively, with the U.K. remaining part of the EU, and Spain opting for the status quo or a more moderate vision of change than Greece's Syriza-led government has embraced. But the worst-case scenario for the EU's future looks increasingly likely: "Grexit" (Greece leaving the eurozone), "Brexit" (the U.K. leaving the EU), and a Spanish election result that resembles Greece's.

Should such a perfect storm occur, the EU's very existence would be in doubt, because other member countries would consider or begin planning their own post-EU futures. Indeed, all of the Euroskeptic and nationalist forces in the EU's member states would strive, with increasing success, to make their respective countries' withdrawal from the EU the central issue in domestic political debate and election campaigns. In other words, nearly 60 years of European integration -- the entire European project -- could be undone.

"The combination of Grexit and Brexit, and its consequences not just for the stability of the eurozone, but for the continued existence of the EU, is probably the greatest danger that Europe has faced since the Cold War's end."

Europe need not go down this path; but, given EU leaders current failure to acknowledge and rise to the challenges they confront, it seems realistic to assume that it could happen. The combination of Grexit and Brexit, and its consequences not just for the stability of the eurozone, but for the continued existence of the EU, is probably the greatest danger that Europe has faced since the Cold War's end.

Moreover, Europe's internal crisis is playing out in a dangerous, unstable geopolitical environment. Though external threats may bolster strategic cooperation among the EU member states, this may not be enough to keep the Union intact, particularly given Russia's effort to divide Europe by strengthening its nationalist, Euroskeptic and xenophobic forces.

Preventing the EU from falling apart will require, first and foremost, a strategic solution to the Greek crisis. Greece needs both money and reforms -- rapidly and within the eurozone and the EU. The governments in Athens, Brussels and even Berlin cannot live with Greece as a failed state and economy. The continuing poker game between the Greek government and the troika (the European Commission, the European Central Bank and the International Monetary Fund) hurts all parties involved -- and Europe most of all. It can ultimately end only with a renewed bailout of Greece or with Europe's plunge into disaster.

If Grexit is to be averted, which should be the EU's highest priority, the challenge posed by Brexit would already look significantly less daunting, given that here the risks are spread much more evenly between the Union and the U.K. In fact, the risks are greater for British Prime Minister David Cameron, because it is almost certain that Scotland will not accept a Brexit, placing the U.K.'s own future in jeopardy.

So, despite Cameron being in a largely self-dug hole, the EU should show some flexibility in its negotiations with Britain over questions that do not concern the Union's basic principles. The U.K. could be offered additional opt-outs from EU policies (such as it now enjoys from the euro). And EU leaders could find a formulation that reassures Britain about the eurozone's impact on the single market.

If, in addition to dealing effectively with the risks of Grexit and Brexit, the EU can strengthen its unity and determination in addressing the Ukraine crisis and confronting today's revisionist Russia, it will have succeeded in fending off today's existential threats. Indeed, it could even emerge from its coming tests stronger than before. That is not the likeliest scenario today, but it could become so if Europe decides -- sooner rather than later -- that the consequences of failure must be avoided at nearly any cost.